The Holiday season is knocking on the doors, and indeed, people cannot stop thinking of how much they will spend on gifts and fun activities. Like with other holidays witnessed in recent years, this Christmas season will be a shopping and spending spree for many. However, the shopping frenzy has both benefits and a few downsides that people should know.
First off, unmonitored spending will leave many people in a worse financial situation than they are now. The implication is that the holiday season’s joy will fade away too quickly as people regret spending too much on gifts and fun. But is there something you can do to avoid getting caught up in the holiday debt trap?
You can certainly manage your holiday spending but only if you can prepare for it. I have listed the top 6 actionable methods that can help you avoid unnecessary expenditure and, in turn, carry the holiday happiness into the next year.
1. Tracking holiday expenses –
There is not a single way to avoid holiday expenses. However, one can control how much they spend by staying aware of every purchase. Preparing and carrying a shopping list is one way to track transactions. A shopping list can help you avoid spending on things for which you didn’t plan. But maintaining a shopping list is not the end. You must stick to the values indicated on the list and find cheaper alternatives for items whose price is higher than anticipated.
2. Budgeting ahead –
Tracking your expenses requires that you have a reference budget. Therefore, write down your budget, including how much you want to spend on each person and activity. A budget should indicate the total amount you wish to use based on your disposable income. When creating a buying plan, one should know that they will still need money after the holiday season. To determine how much money is available for the holiday, check your credit card limit and decide how much cash is available to you. People should learn to budget for what they can afford.
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3. Consider giving home-made gifts –
Spending too more than you are earning is a straight path to a debt trap. Unfortunately, many people will throw care out of the window for buying gifts for loved ones. Many do not know that they can still elicit happiness in their families by giving home-made gifts. Such a gift can either be a painting or home-baked cakes, among other things. Therefore, if you have a talent that can produce a useful holiday present, then better exploit it rather than increase your credit card debt after buying expensive items. A portrait painting can show how much you value someone and think about people who matter to you.
4. Buy only what people need –
The forerun to the holiday season is the best time to decide what types of gifts to buy for people. However, many will not consider the recipients’ needs, and they will thus buy what they can afford or what looks okay. But this should never be the plan. Instead, you should give people a keen ear and know what they wish they could buy. You can either ask people what they need or decide to learn from what bothers them the most. Either way, you will buy gifts that the recipients will treasure and perhaps improve their lives.
5. Watch your credit card debt –
The festive season will give you chances to swipe your card in exchange for loyalty points after buying gifts in your favorite store. But how many people will consider the interest they will have to pay afterward? Increasing your credit card debt is one of the things you should avoid during holidays. The case is so because festivities can tempt you to spend more than you can afford to pay. The best solution is for people to opt for cash payments for as much as possible.
6. Solo shopping –
Solo shopping is an excellent choice for people who find it hard to stick to their budget when shopping with others. If people can easily influence you into buying something, then you are better off shopping alone. It doesn’t matter if it’s your wife, children, workmate, or that good neighbor who wants you to buy something because it looks beautiful even when there were no plans for it. If avoiding them will help you keep to the shopping plan, swipe your credit card fewer times, and then go it alone and buy the necessities.
Unmanaged holiday shopping is the fastest way that can get anyone in a debt trap. Unfortunately, many people still don’t see the importance of planning and managing holiday expenses, and that is why every New Year finds them worrying. However, having a budget, tracking holiday expenditure, and buying only the necessary gifts are among the ways you can reduce spending. You should avoid your credit card for every purchase and instead set aside enough cash for the holidays if you are to escape unwanted debts. Use our free budgeting and goal tracker tools to help you stay on target this holiday season!